Industrial Stocks: A Smokestack Comeback?

In the article "Industrial Stocks: A Smokestack Comeback?", Ben Steverman discusses what the expected outcome of the U.S. economy will be in the future. Thankfully, the U.S. manufacturing has stopped its dramatic decline which can clearly be seen in economic data, recent corporate earnings reports and stock prices. While the stock market data is clear, there are other data that is unclear such as comparing the U.S. Empire State index which increased while the U.S. Philadelphia Fed index slipped during the same time period. What may give investors a better sense of what's really going on is through earnings reports. They will be looking at how strongly different companies are recovering from the recession and if it will continue. However, there are a few reasons to be optimistic. Manufacturing is jumping off a very low base. Companies have also been liquidating their inventories at a rapid rate and eventually those inventories are going to have to get replenished which will result in a significant contribution to the GDP growth over the next few quarters. Another is that energy prices are being driven higher not by weather or inventory problems but by the perception of a very strong global rebound. No matter how people predict the U.S. economy will come out, it is vital that industrial firms do well because so many other parts of the U.S. economy remain depressed. We as an economy need to make sure we can dive up manufacturing and retail otherwise this country will remain on the edge of recession.